Stock Market Update

Equity futures point to a lower opening as Treasury yields and oil prices continue to move higher this morning.

Crude oil is up $1.53 (++1.7%) to $93.70 per barrel as this week's UN session has failed to produce any notable headlines of progress between the U.S. and Iran.

Treasury yields are soaring to multi-year highs in the wake of a bug backup in yields yesterday that pushed stocks lower.

Additionally, the market's expectations of another rate hike continue to increase, with New York Fed President John Williams (voting FOMC member) saying it is reasonable to expect another rate increase this year. The CME FedWatch tool now assigns a 70.9% probability to a rate hike at the October FOMC meeting.

On the trade front, Treasury Secretary Scott Bessent said the U.S. & China agreed to extend the trade truce until January 10, according to Fox News.

There are several economic data releases ahead of the open. Initial and continuing jobless claims and the Q2 current account balance are due at 8:30 a.m. ET, followed by August new home sales at 10:00 a.m. ET.

Today's remaining economic calendar:

• 8:30 AM ET: Q2 Current Account Balance; Briefing.com consensus -$221.0B; prior -$228.6B
• 8:30 AM ET: 09/19 Initial Claims; Briefing.com consensus 202K; prior 196K
• 8:30 AM ET: 09/12 Continuing Claims; prior 1730K
• 10:00 AM ET: August New Home Sales; Briefing.com consensus 610K; prior 607K
• 10:30 AM ET: 09/19 EIA Natural Gas Inventories; prior +44 bcf

In corporate news:

• Alphabet (GOOG 332.75, -2.23, -0.7%) is nearing the release of its Gemini 4 Ai model, according to The Information. 
• Expectations for a new Boeing (BA 199.34, -0.59, -0.3%) aircraft order from China surrounding the Trump-Xi summit have faded, with Boeing instead reportedly focused on finalizing the approximately 200-plane order announced in May.
• Darden Restaurants (DRI 203.48, -10.21, -4.8%) moves lower in the premarket after reporting EPS and revenues in line and reaffirming its FY27b EPS guidance

Reviewing overnight developments:

Asian arkets finished mostly lower, while Japan was the exception as AI and semiconductor shares rallied following an extended holiday, according to Nikkei.

In news:

• Treasury Secretary Bessent said the U.S. and China agreed to extend their trade truce by two months to January 10, though uncertainty about its duration weighed on Chinese equities.
• Higher global bond yields, a stronger dollar, and rebounding oil prices pressured technology and growth shares in Hong Kong.

In economic data:

• Japan's September S&P Global Manufacturing PMI 54.1 (expected 55.0; prior 54.9) and Services PMI 51.6 (prior 52.5)
• Australia's August Unemployment Rate 4.6% (expected 4.5%; prior 4.5%); Employment Change 39,500 (expected 21,500; prior -15,900)
• Hong Kong's August Imports 60.0% m/m (prior 41.0%) and Exports 53.0% m/m (prior 50.7%) --- Equity Markets ---
• Japan's Nikkei: +0.9%
• Hong Kong's Hang Seng: -0.3%
• China's Shanghai Composite: -1.2%
• India's Sensex: -1.7%
• South Korea's Kospi: closed for holiday
• Australia's All Ordinaries: -0.7%

European markets trade mixed as elevated oil prices, high bond yields, and uncertainty surrounding U.S.-Iran diplomacy weigh on sentiment.

In news:

• The Swiss National Bank left its key policy rate unchanged at 0.00%, as expected.
• Energy shares supported the U.K. market, while automakers and technology names weighed on continental markets.

In economic data:

• Germany's September Ifo Business Climate Index 89.9 (expected 89.1; prior 88.8)
• France's September Consumer Confidence 86 (expected 85; prior 86); September Business Survey 101 (expected 102; prior 101)
• Spain's August PPI 13.2% yr/yr (prior 9.2%) --- Equity Markets --- STOXX Europe 600: -0.1%
• Germany's DAX: -0.3%
• U.K.'s FTSE 100: +0.1% Frances's CAC 40: -0.2%
• Italy's FTSE MIB: -0.3%
• Spain's IBEX 35: +0.2%